Thursday, August 31, 2017

How To Calculate Price Targets

Hey folks, 

I got this question about once or twice a week !

It's actually quite simple however just like MANY things in trading, there's a lot more "art" to it than science.
So here's a quick educational post on how to calculate Price Targets for trading setups. 

Keep in mind, that Moving Averages such as 50 and 200 Day MAs, big volume Gaps such as Earnings Gaps, market strength(weakness), a stock's momentum and a stock's short interest also play a role in this but for simplicity's sake, I'll keep things as simple as possible for this educational post. 

First thing to do is:

Find and chart a setup as you'll see in the VECO chart below.... 

Take a look at the attached VECO chart below... You'll see an "Inverse Head and Shoulder" pattern...

I then calculate the difference between the top of the pattern(technical setup) to the bottom of the pattern(technical setup).... 

Then I add that number to the breakout number and you'll have a good first target to work with. 

And here's a more recent example in HD(bullish flag pattern), which was an 'AoT Top Pick' actually in June 2017....

...and this BABA "BULL FLAG" setup which was sent out a few weeks ago 

Of course, nothing in trading works 100% of the time but you'll be surprised how often price targets get hit when using the method I showed you above....  

I hope this helps! 
As always, if you have any questions, comments or feedback, please let me know!! 

Happy trading! 

No comments:

Blog Archive